In what is likely a historic first, the amount of office space in the U.S. is forecast to decline in 2023, according to Jones Lang LaSalle.
This would be the first net decline according to data going back to 2000, JLL says, and it’s likely the first decline ever.
National office inventory is believed to have never declined in the past, though it may have come close to doing so during the Great Depression.
A dearth of new construction and a large amount of office space being repurposed or destroyed accounts for the project decline this year. Less than five million sf of new office space has broken ground in the U.S. this year, while 14.7 million sf has been removed.
The post-pandemic work-from-home trend and the increased costs of borrowing have dampened the office market. Office delinquencies are on the rise, and property values in the office sector are falling.
Recent analysis from market research firm Trepp estimated average office building valuation declines from 52% for those constructed after 2000 to 60% for pre-1950 buildings. This sets “a gloomy tone” for the future office market, Trepp says.
Related Stories
Office Buildings | Mar 3, 2021
Turano Baking Company’s new HQ and test kitchen completes in Oak Park, Ill.
Wright Heerema Architects designed the project.
Office Buildings | Feb 26, 2021
KWK Architects repurposes industrial site and warehouse into office space for Washington University School of Medicine
The project’s first two phases have been completed with the third and final phase under way.
Coronavirus | Feb 24, 2021
COVID-19 spurs need for specific building solutions
A medical supply house’s new call center and a vaccination module that can handle more patients faster are among the latest projects.
Market Data | Feb 24, 2021
2021 won’t be a growth year for construction spending, says latest JLL forecast
Predicts second-half improvement toward normalization next year.
Office Buildings | Feb 18, 2021
Bungie breaks ground on new, expanded HQ
NBBJ is designing the project.
Great Solutions | Feb 11, 2021
Simplifying the return to the office
A new web-based tool from Sasaki takes the guesswork out of heading back to the workplace.
Office Buildings | Feb 8, 2021
Walgreens Technology Center of Excellence completes in Chicago’s Old Post Office
Stantec designed the project.
Office Buildings | Feb 8, 2021
Six lessons learned from our first Fitwel Viral Response Module certification
The Fitwel Viral Response Module is one of several frameworks that real estate owners and operators can use to obtain third-party certification for their efforts ensuring their properties are ready for a safer and healthier return to work.
Building Owners | Feb 4, 2021
The Weekly show, Feb 4, 2021: The rise of healthy buildings and human performance
This week on The Weekly show, BD+C editors speak with AEC industry leaders from Brookfield Properties, NBBJ, and UL about healthy buildings certification and improving human performance through research-based design.
Office Buildings | Feb 3, 2021
NBCU News Group unveils new Washington bureau and studios
The project spans six floors and 80,000 sf.
